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However you plan to exit your business, Connolly Accountants Ltd can help you to minimise your liability to tax. We have helped many firms in the Stony Stratford area and would welcome the opportunity to work with you.
At some point you will want to stop working in your business and either sell up, in which case a business exit plan is crucial and could make all the difference to your long-term personal finances. Alternatively, you may wish to hand over the reins to your successors, in which case good planning will also help to ensure a smooth transition.
Important issues to consider include:
If your business has a market value, or if you are looking to your business to provide you with a lump sum on sale, it is important to start planning in advance, especially if you envisage realising the value of your business in the next few years. Selling your business is a major personal decision and it is very important to plan now if you want to maximise the net proceeds from its sale.
You will need to consider:
We can help with these considerations.
Up-to-date management accounts and forecasts for the next 12 months and beyond will be close to the top of the list of the information which you will need to make available to prospective purchasers.
Anyone who is considering buying your business will want to be clear about the underlying profitability trends. Are profits on the increase or declining? Historical profits drive the value attributable to many businesses and therefore a rising trend in profitability should result in an increase in the business’s value.
This means that profitability planning is particularly important in the years leading up to the sale.
A professional valuation will put you on more solid ground than educated guesswork. We can work with you to determine how you can add value to your business.
When considering business valuations, some of the key questions to ask are:
It is important to consider a number of factors when deciding on the best time to sell your business. These could be factors that may influence potential buyers as well as your own personal circumstances.
Personal factors to consider might include:
Meanwhile, business questions might be:
As a basic rule, CGT is charged on the difference between what you paid for an asset and what you receive when you sell it, less your annual CGT exemption if this has not been set against other gains. There are several other provisions, which may also need to be factored into the calculation of any CGT liability.
CGT reliefs can reduce a 20% CGT bill significantly. It is vital that you consult with us about the timing of a sale and the CGT reliefs and exemptions to which you might be entitled.
The taxable gain is measured simply by comparing net proceeds with total cost (including costs of acquisition and enhancement expenditure). The rate of tax depends on your overall income and gains position for 2024/25. Gains will be taxed at 10% to the extent that your taxable income and gains fall below the higher rate threshold and 20% thereafter. These CGT rates are increased to 18% and 24% for ‘carried interest’ and gains on residential property.
A special tax relief, Business Asset Disposal Relief (BADR), is available for those in business, which may reduce the tax rate on the first £1 million of qualifying lifetime gains to 10%. This is targeted at working directors and employees who own at least 5% of the ordinary share capital of the company and the owners of unincorporated businesses.
The relief is available to individuals on the disposal after two complete qualifying years of:
To qualify for BADR, the company needs to be an individual’s personal company where the individual must:
They must also satisfy one of the following tests:
All planned transactions require careful scrutiny to ensure the available BADR is maintained. Remember to keep us in the picture – we are best placed to help and advise if you involve us at an early stage. Investors’ Relief (IR) also provides a 10% rate with a lifetime limit of £10 million for each individual. The main beneficiaries of this relief are external investors in unquoted trading companies.
CGT is normally only chargeable where the taxpayer is resident in the UK in the tax year the gain arose, although the provisions of any double taxation treaty need to be checked. CGT may not apply where the taxpayer becomes non-UK resident before the disposal and remains non-resident for tax purposes for five complete tax years.
There is no liability to CGT on any asset appreciation at your death.
If you are in the Stony Stratford area and would like advice on tax planning strategies for your business, including business exit strategies, please contact Connolly Accountants Ltd .
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Ruth Drage 2024-10-28 Trustindex verifies that the original source of the review is Google. I have been using Connolly accountants and financial services for many years. They are personable, knowledgeable and professional and make my life a whole lot easier! Singling out Josh Bridges for a special mention here - thanks again Josh for another hassle free tax year :) Tom Lloyd 2024-10-25 Trustindex verifies that the original source of the review is Google. Great experience completing my tax return. Quick, efficient, responsive. Their system for submission is easy to navigate. Good level of additional tax advice provided in the process of making the submission. Thankyou Sarah Jones 2024-10-24 Trustindex verifies that the original source of the review is Google. I have nothing but wonderful things to say about Connolly accountants. With my line of work being in the arts and creative, figures are not really something I want to think or worry about! Josh and the team are incredibly efficient and get the job done, as well as this they stand out because they have actually taken the time to get to know me and offered a bespoke service to match my personality. I can't thank Josh enough as he's taken any worries I may have had away! Emma V 2024-09-30 Trustindex verifies that the original source of the review is Google. Thomas has helped me with my tax return each year and I am always grateful for his efficiency! I highly recommend him and the team. Stephanie Jensen 2024-09-24 Trustindex verifies that the original source of the review is Google. I have worked with Connolly Accountants for many years across various businesses and have always found them to be highly skilled and diligent with meeting deadline and giving prudent advice. Jordan Albert 2024-09-19 Trustindex verifies that the original source of the review is Google. Amazing service here. I had little to no idea on how to manage my Tax, both personally and for my small business. It's now great to have my accounts make more sense and deal with great human interaction too. Benjamin Woodcock 2024-09-18 Trustindex verifies that the original source of the review is Google. This team are amazing. You'd be hard pressed to find a better accounting practice. Julie, Sammie, Elliot, Daniel & Declan have been tremendously helpful in particualr and have an eagle eye for detail, plus some great connections they help you leverage. I couldn't recommend them highly enough! Thank you Connonlly's! Simon Reed 2024-08-30 Trustindex verifies that the original source of the review is Google. Personal and can do approach. Dont feel your dealing with a big impersonal firm but at the same time highly professional deliverables. Family dynasty working and running the firm so vested interest in making it work for them and you. Jason Capel 2024-08-30 Trustindex verifies that the original source of the review is Google. fantastic service from daniel boyles & stuart lewis this year very informative with a agreat attitude and delivery of my accounts & bookeeping & a big thanks to all the staff at connollys for looking after my business all these years with hopefully many more to come.
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